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Costa Chief Blames ‘Human Error’ for Cruise-Ship Crash

The shocking pictures of the Costa Concordia cruise ship sinking off the coast of Italy over the weekend has already knocked 20% from the share price of Carnival, the parent company. Dow Jones‘s Kaveri Niththyananthan discusses.

ROME—The chief executive of Carnival Corp.’s Costa Crociere SpA blamed the captain of the shipwrecked Concordia for grounding the vessel off the coast of Italy, saying the skipper had taken an unauthorized detour from the ship’s route.

An Italian rescue diver jumps into the water near the Costa Concordia cruise liner on Monday.

On Monday Costa Crociere chairman and CEO Pier Luigi Foschi told a news conference the captain, Francesco Schettino, steered the boat too close to the island of Gilgio, causing it to strike a rock formation that capsized the ship on Friday.

“I can’t deny there was human error,” Mr. Foschi said. “We’re talking about an initiative that Commander Schettino took according to his own will and contrary to our rules of conduct.”

Mr. Schettino, who has been detained by prosecutors who are investigating the cause of the shipwreck, has said the ship struck a rock that was unmarked on nautical maps. Italian officials, however, say the boat hit a well-known group of rocks, adjacent to the island’s coastline. Mr. Schettino’s lawyer hasn’t responded to phone calls or a written request for comment.

Mr. Foschi said the ship’s computerized navigation system should have immediately detected the route deviation and automatically sounded an alarm on the command bridge of the vessel. Mr. Foschi didn’t say whether the alarm actually sounded, adding that it was difficult to evaluate what happened in the moments before and after the collision because the company didn’t have access to the ship’s black-box recorder, which has been seized by prosecutors investigating the case.

The Costa Concordia cruise liner lies on its side two days after it ran aground off the tiny Tuscan island of Giglio, Italy.

In order to change the course of any cruise ship, Mr. Foschi said, a captain must override the automatic commands and enter his own. “If you exclude the automatism, you exclude the alarm” of the navigational system, he added.

Costa Crociere and the firm’s parent company, Carnival, have come under intense scrutiny since the ship ran aground late Friday night. A sixth body was pulled from the site of the shipwreck Monday and 16 people remain missing, according to the Italian coast guard. Carnival’s share price plunged on the London Stock Exchange as investors and analysts questioned whether the firm will be able to recoup its costs on the massive ship.

The company considers itself an “injured party,” Mr. Foschi said, adding: “We’re not able today to evaluate whether the ship can be considered a total loss or if it can be partially recovered.”

So far, the firm has declared $93 million in damages, Mr. Foschi said, noting that the ship’s insurance would shield the firm from civil damages and the destruction of the ship. That amount, however, doesn’t take into account “ulterior costs” that are “not classified by insurers,” Mr. Foschi said.

Analysts have also questioned whether the shipwreck will haunt the cruise industry as details from the collision emerge showing the command and crew were sluggish in responding to the crisis.

Mr. Foschi said the captain “followed procedures” after the collision, but the executive said he was “not sure” if the ship sent out an SOS, notifying coast guard officials that the ship was in distress.

An Italian official told The Wall Street Journal that the coast guard learned of the ship’s troubles after passengers phoned police to complain. The coast guard then contacted the ship’s command at about 10:15 p.m., more than a half-hour after the boat hit the rock formation, the official said.

Mr. Foschi said he didn’t think the shipwreck would hurt the cruise industry’s business in the long term and praised the crew for its handling of the crisis.

“I’m convinced that the reputation of the company will recover,” he said. “Holidays on ships are safe.”